February 06, 2005

AT&T’s twenty year death spiral has finally come to an
end. Once the largest company in the
world, last week it was acquired by SBC, one of the Baby Bells spin-offs from
the government mandated breakup of AT&T in 1984. The child bought the parent.

A shadow of its former self, AT&T was acquired for $16
billion (or roughly a quarter of Google’s current market cap.) It will be interesting to see what will
happen to some of AT&T’s forward-looking projects.

Relaunch of AT&T
Wireless Now Unlikely

To the great confusion of consumers everywhere, AT&T
Wireless and AT&T were separate companies. When AT&T Wireless was purchased by Cingular recently, the AT&T
name reverted back to AT&T.

For the past few months, rumors had it that AT&T would
relaunch the the AT&T Wireless brand through an MVNO partnership with Sprint. It seems safe to say that SBC, which is a 60% owner of Cingular will
kill this project. (If they wanted to do
something creative, SBC would relaunch AT&T Wireless as an MVNO for senior
citizens, an overlooked segment to whom the AT&T brand holds
significance.)

Cloudy Future for AT&T’s
Consumer VoIP Play, CallVantage

As a regional bell operated company (RBOC, also sometimes
called an incumbent local exchange carriers, or ILECs) SBC does not see voice-over-IP
(VoIP) as an imperative. AT&T’s
consumer VoIP offering, CallVantage, is actually quite competitive .

However SBC will likely squander the opportunity
to embrace their inevitably digital, VoIP future. Instead, they will worry about cannibalizing
their high-margin, but rapidly shrinking local phone business.

Om Malik points out another factor confounding SBC’s adoption of VoIP may be AT&T’s
willingness to cozy up to cable operators in order to speed the adoption of
CallVantage. The RBOCs are sworn enemies
of the cable companies, so it is unlikely that these partnerships will
continue, thereby clouding the future of CallVantage.

We Will Miss Their
Intellectual Property Firesales

AT&T’s Bell Labs was the premier research and
development institution for much of the 20th century. For a variety of reasons, AT&T repeatedly
failed to capitalize on technologies developed by Bell Labs. Areas where Bell Lab’s researchers made
substantial contributions include semiconductors, voice-compression and cellular technology. The invention of the transistor earned Bell Labs the 1956 Nobel Prize.

Instead of commercially exploiting the intellectual property
(IP) generated by Bell Labs, AT&T either gave it away or licensed it for a
nominal sum. The world was enriched by this
intellectual property -- the creation of billions if not trillions of dollars of weath stemmed from Bell Labs. We would not recognize our telecommunications world today had AT&T
followed the modern IP strategies of firms like IBM and Microsoft, which many argue hinder innovation.

January 18, 2005

The copyright battle is dominated by extremes. On one
hand, the RIAA and the MPAA believe that their customers should give
thanks for such innovative distribution channels as Tower Records and
Blockbuster. On the other, there are the free culture folks who fear that
intellectual property laws are getting out of hand, and that corporations
already have too much control over culture.

Both sides have valid points. The RIAA/MPAA folks are understandably
concerned that digital content can be stolen so easliy. The MPAA, a
reluctant late comer to this fight, was protected by the sheer size of
full-length movies. But alas, Bittorrent has eliminated that flimsy, final
layer of protection. By some accounts,
Bittorrent accounts for 1/3 of all data sent over the internet today (a figure that
I think is too high, though there is no debating Bittorrent’s importance.) Conversely, the free culture folks are spot
on that the INDUCE Act that the lobbyists tried to ram through Congress was creepy. Many believed that this bill was too vague
and too punitive, and that the language used was broad enough that the iPod
could be deemed illegal.

As a society, we have not figured out a way to balance the
rights of consumers to use what they purchase however they want, with the
rights of the record companies and film studios to earn a living. I hope it is abundantly clear to the RIAA/MPAA
folks that suing music downloaders or going after Bittorrent hosts is not going
to make the problem go away. My hope is
that these are just stall tactics while they try to figure out how to reinvent their
increasingly irrelevant business models. A good place to start would be to reexamine their channel and pricing
strategy.

Here are three interesting articles that I came across this
past week regarding copyright issues:

There are ongoing rumors that an RIAA/MPAA contractor is intentionally
spreading malicious trojans through peer-to-peer networks. Where is the NYTimes when you need them? (link)

My favorite intellectual property story to come out of China
was the factory that was caught manufacturing fake VW Beetles. In this article, Sec. of Commerce Don Evans
says that China has "got to start putting people in jail" to show it
is serious about cracking down on widespread counterfeiting and piracy. Sadly, I agree. (link)

Older documentary films made with copyrighted footage are
disappearing because the film makers can not afford to renew the copyrights of
the footage they used in making the film. It seems like a stretch for the Globe and Mail to entitle the article “How
copyright could be killing culture” but this is a disturbing side-effect of tightening
legal restrictions. (link)

January 14, 2005

Lawrence Lessig has written an op-ed in the LA Times that takes
some of the problems I pointed out with Google Print a step further. He suggests that Google is taking on a huge
liability just by scanning books that are potentially under copyright.
He writes:

"...for work not in the public domain, Google's right to scan — to copy
— whole texts to index is uncertain at best, even if it ultimately
makes only snippets available. When permission has been given by the
copyright holder, again there's no problem. But when permission has not
been secured, the law is essentially uncertain. If lawsuits were filed,
and if Google and its partner libraries were found to have violated the
law, their legal exposure could reach into the billions."

I wonder if the market has factored this into Google's impressive price.
I had assumed that if google was brought down, it would be by a
startup, not by a ravenous pack of intellectual property lawyers.

December 16, 2004

The marketing folks at TiVo have done too good of a job. Apparently
they sent a nasty letter to the networks demanding that they stop using
"TiVo" as a verb (i'll link to an article once i figure out how to
insert links...) The worry is that the word "TiVo" has become so
common, that it is at risk of enterting the public domain.

The same
thing happened to Kleenex and Xerox: everyone started calling tissues
Kleenex, and instead of saying "photocopying" everyone said Xerox
(which must have sounded futuristic at the time. I wonder if Google is
beginning to worry about this?)

The downside to having your trademark enter the public domain
is that you lose exclusive rights to the name. Your competitors can use
it. Customer confustion ensues.

My initial reaction to Google Print is that it is a brilliant and
democratic move with a diverse set of benefits. My second reaction was
to hum the tune to "m-i-c-k-e-y m-o-u-s-e"

Copyright protection is a mess in the US. (The only bigger
intellectual property mess being business process and software
patents.) Congress has extended the length of time that a copyrighted
work is protected 11 times! So how long does the creator of a
particular expression of an idea get these days?

http://www.copyright.gov/circs/circ1.html#hlc
A work that is created (fixed in tangible form for the first time)
on or after January 1, 1978, is automatically protected from the moment
of its creation and is ordinarily given a term enduring for the
author's life plus an additional 70 years after the author's death...
For works made for hire, and for anonymous and pseudonymous works ...
the duration of copyright will be 95 years from publication or 120
years from creation, whichever is shorter.

So an author gets between 70 and 120 years of protection! That
makes the 20 years of protection for patents look meager. Basically the
story goes that everytime Mickey Mouse was about to lose copyright
protection, Disney would unleash an arsenal of lobbyists to protect
their crown jewel.

What will be the impact be on Google Print?
It would be a shame if Google Print only had books older than 70 years
old! Hemingway's A Farewell to Arms would be available (published in
1926) but we would have to wait another 18 years to read The Old Man
and the Sea (1952).

I was excited to read in teh NYTimes article that "At least a
dozen major publishing companies, including some of the country's
biggest producers of nonfiction books - the primary target for the
online text-search efforts - have already entered ventures with Google
and Amazon that allow users to search the text of copyrighted books
online and read excerpts."

But a few paragraphs later there is this little torpedo: "The
Amazon and Google programs work by restricting the access of users to
only a few pages of a copyrighted book during each search, offering
enough to help them decide whether the book meets their requirements
enough to justify ordering the print version. Those features restrict a
user's ability to copy, cut or print the copyrighted material, while
limiting on-screen reading to a few pages at a time. Books still under
copyright at the libraries involved in Google's new project are likely
to be protected by similar restrictions."

Time will tell how this will be resolved. With any luck it won't take 70 years.